In many studies involving complex representation of the Earth's climate, the number of runs for the particular model is highly restricted and the designed set of input scenarios has to be reduced correspondingly. Furthermore, many integrated assessment models, in particular those focusing on...

This paper analyzes how climate risks are priced on financial markets. We show that climate tipping thresholds, disagreement about climate risks, and preferences that price in long-run risks are crucial to an understanding of the impact of climate change on asset prices. Our model simultaneously...

We study the effects of carbon risk on equity prices in the US and Europe using disclosed carbon intensity data, and find a negative effect on the cross section of returns and a negative carbon premium. Examining fund flows, we find that institutional investors have an aversion to...

Dynamic programming is the essential tool in dynamic economic analysis. Problems such as portfolio allocation for individuals and optimal economic growth are typical examples. Numerical methods typically approximate the value function. Recent work has focused on making numerical methods more...

Continuous time is a superior representation of both the economic and climate systems that Integrated Assessment Models (IAM) aim to study. Moreover, continuous-time representations are simple to express. Continuous-time models are usually solved by discretizing time, but the quality of a...

Continuous time is a superior representation of both the economic and climate systems that Integrated Assessment Models (IAM) aim to study. Moreover, continuous-time representations are simple to express. Continuous-time models are usually solved by discretizing time, but the quality of a...